Board orders audit procedures for Parrot Island Waterpark; discusses possible AG referral over slide costs

The Fort Smith City Board of Directors reviewed a proposed set of agreed‑upon procedures on Jan. 27 aimed at examining Parrot Island Waterpark’s 2025 financial reporting, cash handling, transfers, outstanding invoices, concession profitability and the calculations that determine management compensation.

Amanda Strange, the city’s director of internal audit (presenting remotely), said the procedures focus on cash and cash reconciliations, a sample‑based review of receipts and payments, transfers between subaccounts, the timing of required financial reporting and analytic checks of concession profitability. Forvis, the city’s external auditor, estimated the work would cost about $30,000–$40,000 depending on how quickly management supplies records and whether significant discrepancies are found.

Directors debated whether the review should include 2024 as well as 2025 for trend comparison; Strange said adding earlier years is possible but would increase cost. Directors also asked whether auditors would have access to bank statements and to concession controls; Strange said bank statements would be requested and that the procedures are designed to test internal controls and identify anomalies that could trigger deeper work.

Separately, the board discussed parameters of a potential referral to the Arkansas Attorney General concerning installation costs for water slides at Parrot Island. City attorney Colby Rowe said the AG’s office sets its own jurisdiction and investigative scope and that the board could pass a resolution asking for an inquiry, though the AG might determine the matter more properly belongs to a civil dispute between private parties. Several directors raised concerns that ARM (a third‑party broker used in procurement) may have provided incomplete cost estimates and that the city had no formal contract with ARM defining obligations, leaving potential remedies in tort (negligence or misrepresentation) rather than contract claims.

Board members asked staff to proceed with the agreed‑upon procedures and to return a contract with Forvis for board action; a director moved to place the Forvis agreement on the Feb. 3 regular meeting agenda and the mayor scheduled that item for action. On the AG question, directors agreed to 'let the issue marinate' and to pursue additional information before any formal referral; no resolution requesting AG action passed at the study session.

Next steps: administration will forward the Forvis procedures contract to the Feb. 3 regular meeting for board action and audit staff will collect records for the agreed‑upon procedures; the AG referral remains pending further information.